Political Economy of the Bretton Woods Institutions: Adapting to Financial Change

The Bretton Woods institutions - the World Bank and the International Monetary Fund - presently face formidable challenges of adaptation. One particularly important feature of the political economy of adaptation by the Bretton Woods institutions is addressed: the private financial markets and instit...

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Bibliographic Details
Published in:World economy 1996-03, Vol.19 (2), p.173-193
Main Author: Henning, C. Randall
Format: Article
Language:English
Subjects:
Adaptation
Bretton Woods System
Change
Changes
Development banks
Financial reforms
History
International finance
International monetary relations
Monetary Policy
Monetary reform
Political Economy
Roles
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Summary:The Bretton Woods institutions - the World Bank and the International Monetary Fund - presently face formidable challenges of adaptation. One particularly important feature of the political economy of adaptation by the Bretton Woods institutions is addressed: the private financial markets and institutions and their relationship to the Bretton Woods twins. The historical evolution of the International Monetary Fund and the World Bank is reviewed, referring to the roles adopted by private and official finance respectively over the course of that evolution. The political economy of these institutions is compared, focusing more on the Fund than the Bank, in the debt crisis of the 1980s and the world of highly mobile capital of the 1990s. It is argued that the shift in the composition of capital flows to developing countries from bank loans to securities and direct investment complicates the work of the two institutions while weakening the political support for their taking an active role in financial crisis management.
ISSN:0378-5920
1467-9701
DOI:10.1111/j.1467-9701.1996.tb00671.x